Qatar Economic Outlook Issue Number 13

Figure 2-6: Components o
f BOP’s current 
account
 
16.0
-9.4
-8.6
27.8
18.8
33.3
-40
-30
-20
-10
0
10
20
30
40
2017
2018
2019
Q1
Q2
Q3
Q4
2020
Q1
Q2
Q3
2020
2021
As
%
o
f GD
P
Current account
Net Services
Net Income
Net Transfer
Net Goods
Source: QCB and prepared by PSA 

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Qatar Economic Outlook 2021 - 2023 
56 
Impacts on Banking Sector
The Ministry of Finance and the Qatar 
Central Bank (QCB) coordinated the 
necessary measures taken to control the 
monetary situation and the balance of 
payments. In April 2020, the Ministry of 
Finance issued international sovereign 
bonds, which were sold in US financial 
markets for about US$10 billion, in order to 
finance the general budget deficit.
In addition, foreign asset swaps and transfers 
to the QCB were carried out throughout 2020, 
as shown in Figure (2-7), since part of the 
QCB balances with foreign banks were 
withdrawn in favour of increasing its balances 
with local banks. Although QCB kept 
increasing investments abroad, either in the 
form of foreign bonds or treasury bills, its 
contribution to the growth rate of QCB’s 
foreign assets gradually decreased, in favour 
of increasing other assets.
For the first three quarters of 2021, the 
operations of the Qatar Central Bank 
changed as needed as follows: (1) In Q1, its 
assets with local banks is reduced in order to 
increase its other assets, (2) In Q2, it reduced 
its investments in bonds and foreign treasury 
bills and its assets with local banks in favour 
of increasing its with foreign banks and other 
assets, (3) In Q3, it reduced its assets with 
foreign banks in favour of increasing its 
investments in foreign bonds and treasury 
bills. (4) preliminary data for Q4 of 2021 
indicate a recurrence of the course of 
banking transactions as they were in Q3. 
As for the implications of the crisis on the 
monetary situation of the foreign assets of 
commercial banks, it is clear from Figure (2-
8) that commercial banks withdrew part of 
their balances with foreign banks in Q1 of 
2020 in order to meet the growing domestic 
demand for credit by public institutions 
throughout 2020. As soon as such monetary 
situations improved since Q3 of 2020, 
commercial banks increased their foreign 
deposits with commercial banks abroad, 
especially during Q1 of 2021 before 
stabilizing during the last three quarters of 
2021. In addition, credit outside Qatar 
contributed negatively during last three 
quarters of 2021 after a positive contribution 
during Q1 of 2021.